the concentration of so much wealth in the hands of fewer and fewer people may be holding back a recovery of the national economy
the US economy has been growing several percent every year. US workers' wages have been growing even faster. Total "sales volume" in the US (final goods & services, intermediate goods & labor) has grown to nearly
$40T / year, higher than ever. Median household incomes, excluding pensions & welfare, have grown to nearly
$50K / year,
higher than ever.
how can you transmute that into "
wealth restricted to fewer & fewer" ? Inexpertly, what the IMF analysts are arguing, is that wealthy people are hoarding their money; and not reinvesting the same. That would be deflationary. More-than-less, GDP "investment" (I) this year, is funded by borrowing from the savings (S) of last year. The private sector saves net earnings this year; then finds a profitable venture to lend them to for next year. That keeps the economy going. Money that would be "squirreled away" is piped back into the economy, borrowed by businesses to buy equipment, build factories, and hire workers to make widgets.
Money which wasn't being spent, is (borrowed and) spent.
If wealthy people save allot (S); but do not lend that money back out; then all that money is de-circulated, "doing nothing in bank accounts". Next year, there could be no investment (I), and the economy (GDP = C+I+G+NX) would contract by 10% (investment is roughly a tenth of GDP spending).
But what do you want -- wealthy people to throw that money away, investing in risky start-ups that go bust? Savings this year (S) becomes investment next year (I)
if there are worthwhile investments to be made. If not, then the economy is unhealthy; and there's no possibility for growth at present anyway. Demanding saved money be
wasted on unprofitable ventures would only throw good money away. That would be like a "private sector stimulus program", where wealthy people "poured money on the economy" -- and it would all flow overseas, through the US trade deficit, for cheap foreign products, even as critics claim that Pres. Obama's stimulus program has already done.
Are you claiming, that
wealthy people, are intentionally sabotaging the US economy, wittingly foregoing profitable investments, specifically out of "spite"? Not that wealthy people have looked, and found no profit potential at present; but that they have looked, and are basically "
burning dollars" (by sequestering them in banks, out of circulation) ? If wealthy people are basically accumulating dollars; and then basically burning them by the wheelbarrow; then they are
sabotaging the US economy. If, however, the US economy is offering wealthy would-be-investors no potentially-profitable possibilities; then that is the economy's fault, not theirs. Wealthy people, having accumulated money, and
not squandering the same, wasting money on unprofitable ventures, at least "treads water", without
losing more money, and is less loss-ful than many other Americans, with their net negative savings rates.
Are wealthy would-be investors, in the US, wittingly sabotaging the US economy, intentionally refusing to finance otherwise-profitable business ventures, specifically to undermine the US economy? 'Cause otherwise, it's
their money; and if you (or i, or anybody else) wants to borrow it, then we have to make it worth
their while. If they are
not sabotaging the US economy, then they would jump at the chance to invest for (future) profit, to the benefit, of the entire US economy, and Society. If you and/or i were entrepreneurs, then we could think up something smart; put together a proposal; and they would finance it; and everybody would benefit.
web references
A Hole in the Bucket Drains Recovery | Fox Business
Net Netional Product
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